help Calculating tax incidence Suppose that the U.S. government decides to levy

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Calculating tax incidence Suppose that the U.S. government decides to levy a tax (such as an excise tax) on cola consumers. Before the tax, 20 billion cases of cola were sold every year at a price of $8 per case. After the tax, 8 billion cases of cola are sold every year; consumers pay $10 per case (including the tax), and producers receive $6 per case. The amount of the tax on a case of cola is per case. Of this amount, the burden that falls on consumers is per case, and the burden that falls on producers is per case.

Explanation / Answer

The amount of tax on a case of cola = 10-6 = $4

Burden that falls on customer = 10-8 =$2

Burden that falls on producers = 8-6 = $2

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